(Jamaica Observer) The Windalco bauxite company, majority-owned by the Russian company UC Rusal, is now facing an uncertain future as both local and overseas banks are allegedly refusing to do business with the company.
At the same time, the Opposition People’s National Party (PNP), which, along with the Union of Clerical Administrative and Supervisory Employees (UCASE), has taken on the role of lobbyist for the bauxite company, alleged on Monday that the Jamaican Government has terminated the company ‘s mining licence to operate its Kirkvine plant in Manchester, which has been out of operation for some time.
UC Rusal, which owns 93 per cent of Windalco, was among 12 Russian companies and their principals who were in April threatens with sanctions by the US Government over what the American authorities consider to be Russia’s “malign activities around the globe”. Individuals, companies and governments around the world who do business with UC Rusal also face the risk of sanctions by the United States.
The US sanctions have targeted oligarchs close to Russian President Vladimir Putin, who include Oleg Deripaska, owner of US Rusal.
UCASE President Vincent Morrison, in a letter addressed to US envoy to Jamaica Eric Khant, a copy of which was obtained by the Jamaica Observer, said despite the fact that the sanctions have been deferred until October 2018, the banking system, both internationally and locally, “have refused to do business” with Windalco.
As a result, Morrison said “workers are being paid in two parts their wages for the month of May, and the company has informed us that the situation could become even worse financially, come the month of June 2018”.
“The plant at Ewarton is running out of bauxite needed for the production of alumina as the company’s cash flow does not allow the company to pay contractors to mine and haul the raw material required for production at the Ewarton plant”, added Morrison.
Fearful of the economic consequences that could affect the workers and the country, the trade unionist has called for an “urgent meeting” with the US envoy to discuss mitigation measures against a possible fallout from the apparent cash crunch faced by Windalco.
In the meantime, Opposition PNP spokesperson on mining and energy Phillip Paulwell has criticised the Andrew Holness-led Government for being slow to utilise “diplomatic leverage” in order to assist Windalco, which, he said, was assisting in the country’s economic growth.
He said in the absence of action by the Government, he has written to the Office of Foreign Assets Control (OFAC) at the US Department of Treasury which enforces economic and trade sanctions for the US Government.
Paulwell, who was speaking at a press briefing at the PNP’s headquarters in Kingston on Monday, explained that intervention from the overseas body would reassure banks that it was safe to do business with the company, as the sanctions had not yet come into effect.
The opposition spokesperson said he felt that it was his responsibility to make contact with OFAC because the party had a “vested interest in Jamaican workers being employed”, and that continued inaction was not an option.
Additionally, he pointed out that other countries, including Ireland, Sweden, and Guyana have utilised this channel and have benefited from positive consideration and action by the United States in allowing significant reprieve under the sanctions regime.
Paulwell said that, although he had met with Minister of Mining Robert Montague about the US Rusal sanctions and possible effects on Jamaica’s economy, it was not clear if the Government had taken steps to contact the relevant authorities.
During the press briefing, Paulwell said the PNP had received information from reliable sources that the Government had, without notice to Windalco, “terminated the company ‘s mining licence to operate its Kirkvine plant in Manchester”.
While acknowledging that it would not have been viable for the plant to be reopened and operating as it had during its prime, Paulwell maintained that the move by the Government was “callous and insensitive” because it would be a distraction from the challenges that Windalco currently faced.
Paulwell added that the termination might cause Windalco to engage in a legal battle overseas that it could “do without” at the moment.
